Preparing for July 1: A Borrower’s Step‑by‑Step Series
With major federal student loan changes arriving on July 1, we’re spending the next few months breaking everything down for you on our blog. No jargon, no confusion—just clear explanations of what’s changing and why it matters.
We’re truly beginning with the basics, understanding how much student loan debt you owe, what type of loans you have, and your current repayment plan. These are the most crucial things to know before the new rules take effect.
To complete this step you’ll need to distinguish between the two overarching types of student loans, federal and private student loans. The majority of student loan debt is federal, so if you aren’t sure, the best place to start is the studentaid.gov website.
Federal Loans - Login at studentaid.gov.
If you have federal student loans, you should already have an account. If you’ve forgotten the details you’ll be prompted to enter personal information to retrieve your login.
Once on the site, you’ll be able to navigate to the ‘My Loans’ section to see details about your loan balances & interest rate, the type of loans you have, and their repayment plan(s) which you’ll need to make important decisions.
Keep in mind, you can have more than one federal student loan servicer, but studentaid.gov should reflect all of your federal student loans across different federal servicers.
Private Loans
If you have private student loans, you’ll need to log in directly to your lender’s website to view your loan details. If you’re unsure whether any of your loans are private, checking your credit report can help you confirm.
This series focuses on federal student loans, so the guidance and options discussed below apply specifically to federal loans.
First, it helps to understand the two main categories of repayment plans: those that pay off your loan over a set period of time (term‑based plans) and those that base your monthly payment on your income (income‑driven plans), which may not fully pay down your balance over time.
You want your student loan repayment strategy to align with your broader financial goals, so it helps to be clear about what those goals are. Below are some of the most common student loan repayment goals to consider.
There are a few categories of student loan forgiveness, all of these are for federal student loans, not private. We’ll do a deeper dive on these in a future blog post. Both PSLF & IDLF require borrowers to make payments under one of the income-driven repayment plans. So if your goal is to pursue forgiveness under those programs, you MUST make payments under one of the income-driven repayment plans.
Here are the forgiveness options:
The most affordable repayment options are usually the Extended Repayment Plan or one of the income‑driven repayment plans (IBR, PAYE, or ICR). The Graduated Repayment Plan can look appealing at first, but payments increase every two years and can end up tripling over time. Many borrowers eventually have to switch out of graduated plans because the rising payments become unaffordable.
Keep in mind that payments under income-driven plans don’t have to pay down the balance of the loan. If your income is low enough relative to your debt, your balance may grow. In this situation, it’s critical that you achieve loan forgiveness (either PSLF or IDLF depending on your employment type) to get rid of your student loan balance.
Be wary of forbearance, interest still accumulates and it’s not a long term solution. Eventually, you will have to make payments and will need to identify an affordable repayment plan to keep your loans in good standing.
For borrowers with higher incomes who don’t qualify for PSLF (or choose not to pursue it), your monthly payment amount directly affects how quickly you’ll repay your debt. Larger payments shorten your repayment timeline—but it’s essential to choose an amount you can comfortably afford.
You can increase your payment in two ways:
One important note: servicers typically apply extra payments by moving your due date forward. If you prefer your due date to stay the same, update your settings in your servicer’s portal (look under repayment options for the setting that prevents due‑date changes) or contact your servicer directly.
Be wary of refinancing federal student loans. This privatizes federal loans and makes them forever ineligible for federal student loan benefits like loan forgiveness and flexible repayment options. Interest rates in the market are often not significantly better than federal interest rates so consider your choice carefully.
Before you make a change, estimate your monthly payments using the Federal Student Aid Loan Repayment Simulator https://studentaid.gov/loan-simulator. You’ll be able to see your estimated monthly payments under the different repayment plans.
Be sure to choose a plan that you can afford and meets your goals for loan forgiveness (or not).
Once you’ve identified the repayment plan that works best for you, you can change repayment plans anytime for free— by applying for an income‑driven plan at https://studentaid.gov/idr/ or just contacting your servicer for all other plans.
Now that you have an understanding of where you are today, your goals, and the changes you need to make to meet those goals. You can take action on those today.
Our next post will talk about the impact of the key changes coming for borrowers in July, how those might impact you, and key deadlines you may need to meet.
If you have Tuition.io: our student loan coaches are available to help you choose the best repayment plan and navigate the process. Log in to Tuition.io to schedule a 1:1 with a coach.
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